Musk’s Natural Gas Push Lifts Focus on Energy Stocks

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Musk’s SpaceX and xAI Lean Into Natural Gas

Although Elon Musk is widely associated with the rise of electric vehicles through Tesla, his other major enterprise, Space Exploration Technologies (SPCX), or SpaceX, is positioning natural gas at the center of its growth plans. The company expects to use natural gas both to power xAI’s data centers and to manufacture launch fuel for its Starship rockets. Together, these initiatives highlight natural gas as an essential fuel not only in traditional industries but also in emerging, technology-driven segments of the economy.

xAI’s primary data centers, known as Colossus and Colossus II, are designed to run mainly on natural gas. In SpaceX’s initial public offering (IPO) filings, management noted that, “Going forward, COLOSSUS II is expected to be primarily powered by a dedicated natural gas power plant.” The documents also emphasize that “our ability to scale our infrastructure depends in part on our continued access to natural gas supply at economically feasible prices.”

Natural gas is also central to SpaceX’s launch operations. Starship requires launch fuel derived from natural gas, and to secure reliable access, SpaceX plans to construct a dedicated natural gas pipeline. This infrastructure is described as critical to enabling repeated Starship launches as envisioned by the company.

Natural Gas as a Long-Term Economic Pillar

The planned use of natural gas for Starship launch fuel, pipeline infrastructure, and power generation for xAI’s data centers underscores its ongoing importance. The combination of natural gas-powered turbines, data center energy needs, and even the possibility of SpaceX eventually drilling its own natural gas supports the idea that this fuel remains central as the world incorporates more renewable energy sources.

The broader takeaway is that natural gas appears positioned to remain a core part of the global energy landscape for many years, supporting both legacy applications and fast-growing digital infrastructure.

Two Stocks Positioned in the Natural Gas Value Chain

Amid this backdrop, two companies stand out as potential beneficiaries of sustained natural gas demand and the AI-driven power surge: GE Vernova (NYSE: GEV) and Argan (NYSE: AGX).

GE Vernova: Gas Turbines in High Demand

GE Vernova is described as the world’s largest gas turbine manufacturer. The company has experienced a sharp rise in sales and order backlog in recent years, powered by escalating electricity needs from AI data centers. Demand has been robust enough that GE Vernova can now enter into slot reservation agreements (SRAs) with customers, allowing those customers to pay in advance to secure future manufacturing capacity for equipment.

This situation marks a major reversal from the period when the business operated as GE Power within the former General Electric. Less than a decade ago, it was regarded as the least attractive and least highly valued segment of General Electric, as demand for its core gas turbine products weakened during the clean energy transition.

Recent guidance reflects a stronger outlook. The company has already increased its full-year 2026 forecast once this year, and there is potential for further revisions when GE Vernova reports its second-quarter results.

On the April earnings call, Chief Executive Officer Scott Strazik highlighted the acceleration in orders, stating, “In the last 90 days, we’ve added $13 billion to our total backlog and now expect to reach $200 billion in backlog in ’27 versus our previous expectation of ’28.”

Argan: Engineering and Construction Beneficiary of the AI Power Boom

While GE Vernova supplies the power-generating equipment, another set of companies focuses on engineering, procurement, and construction for utilities, power producers, and commercial users deploying that equipment. Argan (NYSE: AGX) operates in this side of the value chain.

Argan has undergone a notable transformation in recent years. Its share price has climbed approximately 1,400% over the past three years and 95% so far this year. Similar to GE Vernova – whose equipment is used in Argan’s project work – Argan has enjoyed a significant increase in its order backlog.

Contractors like Argan can benefit disproportionately in periods of strong activity, as rising project volumes improve utilization of resources and can lead to meaningful margin expansion.

The article notes AGX Operating Margin (TTM) data from YCharts, indicating the company’s profitability dynamics in the current environment.

Implications for Energy-Linked Equities

For both GE Vernova and Argan, the central issue is whether order pipelines can continue to build from here. Based on SpaceX’s IPO disclosures, investment plans, and explicit decision to anchor its operations to natural gas, demand signals appear supportive.

If SpaceX’s approach is indicative of broader trends in AI infrastructure and advanced launch systems, it suggests that natural gas and the companies servicing that ecosystem could remain in favor with investors focused on the intersection of energy and technology.